Market Overview: FTSE 100 Futures
FTSE 100 futures moved higher last week with a bull breakout of an inside bar, a High 2. It is still BOM on the weekly chart, but the daily bulls are getting buy signals. After getting another always-in-short signal, the bears want the price to fail at the MA and see this as a pullback. The bulls need followthrough.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures was a bull bar with no tail closing near its high last week, a trend bar.
- The bar had no lower tail, just like the bull bar before it, which shows the urgency of the bulls.
- It is a High 2 buy setup around the longer-term MA and closed right at the MA, which is not as bullish as possible.
- It is the 5th reversal in a trading range, a triangle and a BOM pattern. So traders should stop trading after this and wait for more information.
- Traders able to trade small, scale in, and BLSHS, would look for a High 2 in the low of a range or to fade a Low 2. This is what is happening.
- The Low 2 did not trigger on this time frame, so it is implied – meaning it happened one timeframe lower.
- The bulls got a strong microchannel and expected a second leg up. But they should not have let the pullback be so deep. That is disappointing.
- The bulls want a strong follow-through bar like last week and closing far above the MA. The more it closes on its high, the higher above the MA it closes, the more traders will buy.
- The bears see consecutive bear bars closing below the MA and closing on their lows. That is technically always in short. They expect a pullback and then another leg down.
- That last bear bar might have been the non-symmetrical second leg.
- Breakouts of inside bars fail at a higher rate. Inside bars are triangles on lower timeframes, and because they are small bars, the market often tests both sides of them.
- Most traders should wait until we are clearly out of breakout mode (BOM.) That might mean waiting for 2 or 3 consecutive bull bars and looking to trade a second leg up.
- Expect sideways to up next week.
The Daily FTSE chart
- The FTSE 100 futures market was a big bull trend bar with no lower tail and closing near its high, so we might gap up on Monday.
- We said last week there was a credible buy setup low in a trading range, and it turned out to be a great trade!
- We are in the lower third of a trading range, and a late leg usually means profit-taking by the bears. The bulls wanted a weak signal and got one last Friday – the big bear bar with a tail.
- So, 4 out of 5 bull bars last week, but lots of overlap – tails up and tails down – so trading range price action.
- The bulls see a higher low, a trendline break, and a test and are looking to break strongly above the midpoint of the range.
- They broke above the lower high on Oct 25th and got a higher-low. They see the start of a bull trend on a lower timeframe.
- The bears see a strong sell climax, a vacuum test of the prior breakout point on Aug 24th. That started a strong bull spike and closed the last open gap.
- The bears wanted two legs up to the MA, and a sell signal, but the bar was too big. The bears might be looking for a Low 3, a type of wedge bear flag.
- That was likely on Thursday. We did not trigger the sell below it and are reversing up.
- Traders should be looking to buy low in the channel and sell high. Or wait for a clear breakout either way.
- The bulls also see a break above the failed double top and are looking for a measured move. That target, along with the bull spike, takes us above 7600.
- The bears see a channel with a few legs and will bet against a bull breakout of a bear flag, a low-probability trade.
- Traders are deciding if this is a pullback from the bear move down or a new move up to close the open bul gap above.
- Expect sideways to up next week.
Market analysis reports archive
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